Category: Chamber Corner Chamber Corner
Published: 16 March 2022 16 March 2022

There is a push to make business socially and environmentally conscious, but that assumes business and social responsibility are mutually exclusive ideas that have to be forced together. Many people see business as a cold, amoral exercise which places profit above all else. It's where we find expressions like, "It's not personal, it's just business." Sayings like this create a separation between ethical behavior and the creation of wealth, as if these two pursuits are mutually exclusive. The truth is that a company that acts in a way that benefits its customers will ultimately reap rewards in the form of return business and consumer goodwill. As Adam Smith famously said, "It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard for their own interest." Smith correctly recognized that every business is not only enriched by adhering to ethical practices, but in many ways depend upon them.

Let's take two hypothetical lumber harvesting operations. Company A cuts every tree, regardless of its species and maturity, not bothering to replant or secure the soil for the next crop of trees. Initially, the company does quite well, because they sell everything they take. In the short term, they manage to create profits. However, this can go on only as long as they have timber stands to harvest, and once they're gone, the profits will dry up and disappear. Company B uses sustainable practices, selectively harvesting a woodlot, leaving enough behind to ensure another crop in the future. In the short term, company B will have lower earnings than Company A, but their business practices guarantee that they will have resources to harvest in the future, making company B a much more profitable and stable company over time. Environmentally sustainable practices aren't merely idle virtue-signaling. They are becoming increasingly necessary as the human population increases, and along with it, the demand for resource-intense goods and services.

Any company can benefit from practices that respect the environment and preserve the dignity and well-being of those involved. A company that treats its workers with dignity and respect will most likely have lower turnover, resulting in an experienced and highly motivated workforce. Large tech companies like Google and Facebook retain their highly valuable employees by making the workplace a space where people want to come and spend their time, with amenities like sports facilities, restaurant-style food options, and in-house day care. These things cost money, but over time, it ensures that these companies are able to retain the sharpest minds in the business.

You don't have to be Google or Facebook to create an environment of dignity and respect in your workplace. You'll find that one can be a hard-nosed businessperson with an eye for profit without taking after Scrooge and Marley. Treating people well and creating positive relationships will ultimately do great things for your bottom line, giving new meaning to the Golden Rule. Like any good business transaction, it's a win-win: by enriching the lives of others, you end up bolstering your own bottom line.

And that is good business.